Appeal granted for service tax refund on residential construction exemption, not unjust enrichment.

The Tribunal allowed the appeal by M/s Quality Builders & Contractor, granting the refund of service tax deposited under mistaken belief. It held that the construction of individual residential houses was exempt under the Exemption Notification dated June 20, 2012, and the refund was not barred by the principles of unjust enrichment. The Tribunal set aside the Commissioner (Appeals) order and ruled in favor of the appellant.

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Issues Involved:
1. Refund of service tax deposited under mistaken belief.
2. Applicability of Exemption Notification dated June 20, 2012.
3. Principles of unjust enrichment.

Detailed Analysis:

1. Refund of Service Tax Deposited Under Mistaken Belief:
The appellant, M/s Quality Builders & Contractor, sought a refund of service tax deposited under the mistaken belief that service tax was leviable on the construction of individual independent residential houses. The refund claims were for three periods: 01.07.2013 to 30.09.2013 (Rs. 84,504), 01.01.2014 to 31.02.2014 (Rs. 25,456), and 01.04.2013 to 30.06.2013 (Rs. 1,90,944). The appellant contended that the houses constructed for the Rajasthan Housing Board were individual units with independent entries and utilities, and hence, not subject to service tax.

2. Applicability of Exemption Notification Dated June 20, 2012:
The appellant argued that the construction of individual/independent residential houses was exempt from service tax under the Exemption Notification dated June 20, 2012, both prior to and after July 01, 2012. The Commissioner (Appeals) denied the exemption for the period after July 01, 2012, stating that the appellant could not claim the benefit of the said notification. However, the Tribunal noted that the definition of "residential complex" under Section 65(91a) of the Finance Act, 1994, includes buildings with more than twelve residential units. The appellant's construction of individual houses did not meet this criterion. The Tribunal referenced previous judgments, including Macro Marvel Projects Ltd. v/s Commissioner of Service Tax, Chennai, and Beriwal Constructions Co. vs Commissioner of Central Excise & Service Tax-II, which supported the appellant's stance that individual residential units were not taxable as "residential complexes."

3. Principles of Unjust Enrichment:
The Commissioner (Appeals) also rejected the refund claim on the grounds of unjust enrichment, asserting that the appellant had passed on the service tax burden to the Housing Board. The Tribunal disagreed, noting that the work orders specified that the service tax was to be borne by the appellant. The Allahabad High Court's decision in Indian Farmers Fertilizers Coop. Ltd. established that a refund can be claimed by the person who bore the incidence of tax. The Tribunal found that the Housing Board had deducted 50% of the service tax under the reverse charge mechanism from the amount payable to the appellant, further supporting the appellant's claim.

Conclusion:
The Tribunal set aside the Order dated 09.01.2017 passed by the Commissioner (Appeals) and allowed the appeal, concluding that the appellant was entitled to the refund of service tax deposited under mistaken belief, that the construction of individual residential houses was exempt under the Exemption Notification dated June 20, 2012, and that the refund was not hit by the principles of unjust enrichment.

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